Latest news with #JPY
Japan Today
a day ago
- Business
- Japan Today
Reaction to U.S. trade deal with Japan
By Reuters Asia bureaus (Reuters) -President Donald Trump said the U.S. and Japan have struck a deal that will lower the hefty tariffs Trump had threatened to impose on goods from its Asian ally while extracting commitments for Japan to invest $550 billion in the U.S. and open its markets to American goods. The agreement - including a 15% tariff on all imported Japanese goods, down from a proposed 25% - is the most significant of the string of trade deals the White House has reached ahead of an approaching August 1 deadline for higher levies to kick in. COMMENTS CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE GROUP, MELBOURNE: "Clearly the Japanese equity market likes the deal, and while still scant on details, the move in autos is pronounced and buying activity across the market is picking up and pushing the index closer to 41,000. The 40-year JGB auction will get increased focus, although the issuance size has been taken down and this may be helping the ultra-long end to outperform, with the trade deal causing the 5 & 10-year part of the JGB curve to underperform, with some punchy moves higher in yields. "Traders are less interested in moving the JPY around, which is surprising given the move in 2-year JGB and the modest uplift in BOJ expectations - but the talk on the floors of a snap election offers some degree of political risk that may be keeping JPY traders sidelined." KAZUTAKA MAEDA, ECONOMIST, MEIJI YASUDA RESEARCH INSTITUTE, TOKYO: "Japan's success in avoiding the earlier proposed 25% tariff and securing a lower rate for autos is a positive outcome for the Japanese economy. This deal reduces the risk of a recession. However, the timing of the agreement is politically unfortunate. Had Prime Minister Shigeru Ishiba finalised the deal before Sunday's upper house election, it might have bolstered his party's performance." PRASHANT NEWNAHA, SENIOR ASIA-PACIFIC RATES STRATEGIST, TD SECURITIES, SINGAPORE: "Markets are greeting the news of a U.S.-Japan trade deal as a positive surprise given first the LDP losing its upper house majority was seen as delaying trade negotiations and second the 15% tariff headline is below the 24%-25% levels Trump threatened in April and earlier this month. One fly in the ointment with this trade deal could be Trump's demand for Japan to open its borders to U.S. agricultural imports. This could face significant political hurdles for its implementation and further destabilise Japan's already fragile political landscape." RICHARD KAYE, PORTFOLIO MANAGER, COMGEST, TOKYO: "Japan's exporters had already adjusted to tariffs – average export prices to the U.S. dropped 18% last month. So, the effect of a deal is perhaps not as big as it might seem. "Ishiba is probably thrown a lifeline by the deal, following his loss of governing majority in last Sunday's election. A key point to watch will be rice imports: given the political sensitivity, it is conceivable that Japan waited till Sunday's election to agree anything here; but flexibility on rice imports would vastly ease Japan's rice shortage, which has become a major source of inflation. MA TIEYING, SENIOR ECONOMIST, DBS, SINGAPORE: "The deal helps reduce tariff-related uncertainty for Asia's second-largest economy. The 15% tariff may also serve as a benchmark for other North Asian economies, such as South Korea and Taiwan, in their own trade negotiations with the U.S. "That said, it remains uncertain whether the agreement will meaningfully lift Ishiba's domestic approval. Inflation and rising living costs — not tariffs — were the main drivers behind the LDP's losses in Sunday's upper house election. While the removal of tariff uncertainty should help ease concerns about 2H growth outlook, lingering political and fiscal uncertainty will likely keep the BOJ cautious on rate hikes." SHANE OLIVER, CHIEF ECONOMIST & HEAD OF INVESTMENT STRATEGY, AMP, SYDNEY: "It's a good sign that deals are being made ahead of even higher rates threatened from August 1. That said, the rates so far (15% on Japan and 19-20% on several Asian countries) are way up on levels at the start of the year and levels where most assumed they would settle. "The deals are providing some boost to market sentiment on the ground that worst-case tariff rates have been avoided, but share markets have already rallied sharply to new highs in many cases... So, a lot of good news is already factored in." SHOTARO MORI, SENIOR ECONOMIST, SBI SHINSEI BANK, TOKYO: "As Bank of Japan Governor Kazuo Ueda had previously indicated expectations of tariffs exceeding 10%, the 15% rate falls within the BOJ's anticipated range. Now that the rate is finalised, attention will turn to economic data to be released from August onward, particularly Q2 GDP and corporate earnings. If corporate earnings for April–June are not too weak, the BOJ could move to raise interest rates as early as in October." CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY: "The deal - which sets a much lower tariff rate on Japanese imports including autos - looks to be a positive outcome for Japan. The brief and small lift in the JPY may suggest a US-Japan trade deal was somewhat in the price before the announcement. Concerns about higher Japanese government spending and borrowing also continue to keep downward pressure on the JPY. The 40-year JGB auction later today may be the next source of volatility for the JPY." CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC BANK, SINGAPORE: "There was some knee-jerk reaction to the trade deal, but largely the moves have stabilised with the dollar/yen trading near its 10- or 11-day low. With tariff uncertainty out of the way for Japan, we keep our eyes peeled on two risks going forward for the dollar/yen - political risks if Ishiba still holds on and if there are any changes to credit rating, dependent on the country's fiscal health." CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE: "Expectations for a breakthrough were low, so Trump's announcement delivers a mild upside surprise — providing near-term relief for Japanese equities. The reduced 15% tariff, down from the previously flagged 25%, is meaningful and should lift sentiment in export-driven sectors, even if the fine print, especially on autos, remains critical. Markets will largely discount the $550 billion FDI headline as political theatre rather than a tradable catalyst. "Strategically, the deal allows Japan to sidestep immediate tariff escalation, while Trump's attention shifts elsewhere." KRISTINA CLIFTON, SENIOR ECONOMIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY: "We don't know all the details yet, apart from just that he will place a 15% tariff on imports from Japan. "It's a lower rate than what President Trump announced on Liberation Day, so to that end, it's a better outcome than potentially they could've seen. Steel, aluminium, and also cars are important exports for Japan, so it'll be interesting to see if there's any specific carve-outs for those." HIROFUMI SUZUKI, CHIEF CURRENCY STRATEGIST, SMBC, TOKYO: "This is good news for the Japanese economy. "There are reports that automobiles will also be subject to a 15% tariff, which is clearly good news. I don't think this alone will lead to a Bank of Japan rate hike next week, but the possibility of a rate hike between September and October has increased. This will create pressure to buy the yen." © (c) Copyright Thomson Reuters 2025.
Hypebeast
2 days ago
- Lifestyle
- Hypebeast
Mizuno Expands WAVE PROPHECY LS Line with Two New Grayscale Iterations
Name:Mizuno WAVE PROPHECY LS 'Light Grey,' 'Grey'Colorway:'Light Grey/Dark Grey/Grey', 'Grey/Black/Dark Grey'SKU:D1GA3337-04, D1GA3337-05MSRP:¥27,500 JPY (approx $186 USD)Release Date:July 25Where to Buy:Mizuno, Various Retailers Mizunois expanding its flagship technical running sneakers, theWAVE PROPHECY LS, with two new iterations. The latest models center on a grayscale palette, notably coming in 'Light Grey' and 'Grey.' The 'Light Grey' model predominantly sports its namesake hue as a mesh upper, embellished with grey and dark gray overlays. Similarly, the 'Grey' variant is paired with black and dark grey accents for subtly striking tonal contrasts. Both sneakers showcase Mizuno's signature Infinity Wave sole technology, engineered for enhanced stability and shock absorption. Designed as a performance-lifestyle hybrid, the WAVE PROPHECY LS blends technical innovation with street-ready aesthetics — delivering comfort, durability, and visual edge in equal measure.
Japan Forward
2 days ago
- Business
- Japan Forward
Can Alaska LNG Tip the Scales in Japan–US Tariff Talks?
As negotiations between Japan and the United States over President Donald Trump's tariffs intensify, a US liquefied natural gas (LNG) project is viewed as Tokyo's trump card. The project involves a 1,300-kilometer pipeline running from the North Slope gas field in northern Alaska down through the state to a newly constructed liquefaction plant. Once completed, it could supply 20 million tons of LNG annually to Japan and other East Asian countries. The concept itself has existed for a long time, but the primary obstacle has been the enormous cost. Estimated at $44 billion USD (over ¥6 trillion JPY), the project is more than twice as expensive as another LNG project currently underway in Texas. With rising material prices, the cost is expected to increase even further as the project undergoes additional review. If the project's costs are passed on to LNG prices, it could lead to "high prices" for the consumers. Scheduled to begin operations in 2030, after Trump's tenure, the project faces uncertainties. Takafumi Yanagisawa, senior researcher at The Institute of Energy Economics, Japan, points out that "the risk of policy changes following a change in administration must be carefully considered." There are clear advantages for Japan. Currently, most US-produced LNG is shipped from Gulf Coast terminals, taking roughly 30 days via the Panama Canal and about 40 days via the Cape of Good Hope. In contrast, LNG shipped from Alaska can reach Japan in under 10 days. US-produced LNG, including but not limited to that from Alaska, has another advantage: it does not contain a "destination clause" restricting resale to third parties. A tanker loaded with liquefied natural gas (LNG) arrives at a pier. (©Sankei) Japan's LNG procurement is based on long-term contracts that ensure a stable supply of a fixed volume over an extended period. But even if demand falls, such as during a warm winter, the contracted amount must still be purchased. Since US LNG contracts lack a destination clause, any surplus can be resold to other countries, helping Japan mitigate the risk of excess supply. JERA company of Japan signs Liquified Natural Gas (LNG) agreement at the U.S. Department of Energy headquarters in Washington, D.C. on June 11, 2025. (©US Department of Interior) Private companies are already expanding their procurement of US LNG. JERA, Japan's largest thermal power producer, has signed contracts with four American companies to purchase up to 5.5 million tons of LNG annually. While diversifying supply sources is the primary goal, another important factor is that "the contracts offer greater flexibility" compared to LNG imports from the Middle East, says Mineko Hida, general manager of JERA's LNG Division. JERA has also expressed interest in the Alaska LNG project. At a press conference in late June, Chairman Yukio Kani praised the concept as "very good." He emphasized the short transport time to Japan and the absence of geopolitical risks along the route, such as those linked to the Strait of Hormuz in the Middle East. JERA is reportedly closely monitoring the ongoing review of the project plan. US LNG currently accounts for about 10% of Japan's total LNG imports. With global demand for LNG expected to continue rising, increasing imports from the US will also help strengthen the country's energy security. Prime Minister Shigeru Ishiba and US President Donald Trump meet in the Oval Office, the White House, on February 7. (©Prime Minister's Office) In the Japan-US tariff negotiations, differences persist over issues such as automobile tariffs. President Trump has repeatedly labeled trade with Japan in automobiles as "unfair." However, increasing imports of American cars, which are unpopular among Japanese consumers, or reducing Japan's automobile exports, is unrealistic. If Japan concedes too easily, it risks encouraging repeated unreasonable demands. The Japanese government should therefore approach the negotiations with firmness and persistence. On the other hand, if Washington remains focused on correcting the trade imbalance, no argument about the contributions of Japanese companies to the American economy is likely to sway President Trump. The only way to break the deadlock is by expanding imports of US products that also benefit Japan. While the Alaska LNG project won't immediately reduce the US trade deficit, advancing this initiative with Japan's involvement — one of Trump's pet projects — could have a positive impact. President Donald J. Trump participates in a walking tour of Cameron LNG Export Terminal Tuesday, May 14, 2019, in Hackberry, La. (©White House/Shealah Craighead) In early June, the Ministry of Economy, Trade and Industry sent Takehiko Matsuo, the Vice Minister for International Affairs, to a US government briefing on the Alaska LNG project. While it's clear the government is considering the project as a bargaining chip, another senior Ministry official expressed caution, stating, "LNG prices are directly linked to electricity and gas rates. If the price is high, we simply won't buy it. It all depends on economic viability." So how should Japan engage with the risky Alaska LNG project? Yanagisawa stresses that if Japan decides to participate, "government involvement is essential." He suggests that development support through the Japan Oil, Gas and Metals National Corporation (JOGMEC) could be considered to help keep LNG prices affordable. Should it prove difficult for Japan to take on the project alone, another option would be to share the investment burden with other Asian LNG-importing countries and regions, such as South Korea and Taiwan. "If it's economically viable, then we should do it," the senior METI official said, without ruling out the possibility. Can we leverage the few cards we hold as negotiation tools to break the deadlock? Now is the time to apply wisdom and safeguard Japan's national interests. Author: Shunichi Takahashi, The Sankei Shimbun ( Read this in Japanese )
Business Recorder
2 days ago
- Business
- Business Recorder
Asian stocks firm as investors look to tariff negotiations, earnings
SINGAPORE: Asian share markets held their ground near a four-year peak on Tuesday, buoyed by Wall Street's closing record high ahead of a slate of corporate earnings while investors took stock of tariff negotiations between the U.S. and its trading partners. The Japanese markets returned to action after a holiday in the previous session following the weekend's election where the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares briefly jumped at the open before trading modestly higher, while bonds had a muted reaction as the election results were largely priced in and were not as bad as investors had feared. The yen rallied 1% on Monday, recouping some of the losses from past weeks and was last little changed at 147.46 per dollar on Tuesday. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion which is negative for Japanese assets, including the yen. 'The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen.' MSCI's broadest index of Asia-Pacific shares outside Japan hit its highest level since October 2021 in early Asian hours but was last little changed. The index is up nearly 16% this year. Overnight, the S&P 500 and the Nasdaq notched record-high closes on Monday, lifted by Alphabet and other megacaps ahead of a burst of earnings reports this week. Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. 'The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view,' Clifton said, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5% in the previous session but still away from the near four-year high it touched at the start of the month. The single currency is up 13% this year as investors look for alternatives to US assets bruised by tariff uncertainties. The dollar index measure against six other key currencies was at 97.905. The rumblings around the Federal Reserve's independence and whether U.S. President Donald Trump will fire Fed Chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. U.S. Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the U.S. central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, 'provided inflation expectations remain in check amidst worries about Fed independence.' In commodities, oil prices edged lower on concerns that the brewing trade war between major crude consumers the U.S. and the European Union will curb fuel demand. Brent crude futures fell 0.35%, to $68.97 a barrel, while U.S. West Texas Intermediate crude eased 0.31% to $66.99 per barrel.
The Advertiser
3 days ago
- Business
- The Advertiser
Asian stocks firm as investors eye tariff negotiations
Asian share markets have held their ground near a four-year peak, buoyed by Wall Street's closing record high ahead of a slate of corporate earnings, while investors take stock of tariff negotiations between the US and its trading partners. The Japanese markets returned to action after a holiday following a weekend when the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares briefly jumped at the open on Tuesday before trading modestly higher, while bonds had a muted reaction as the election results were largely priced in and were not as bad as investors had feared. The yen rallied one per cent on Monday, recouping some of the losses from past weeks and was last little changed at 147.46 per dollar on Tuesday. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion which is negative for Japanese assets, including the yen. "The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen." MSCI's broadest index of Asia-Pacific shares outside Japan hit its highest level since October 2021 in the early Asian hours but was last little changed. The index is up nearly 16 per cent in 2025. Overnight, the S&P 500 and the Nasdaq notched record-high closes on Monday, lifted by Alphabet and other megacaps ahead of a burst of earnings reports this week. Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. "The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view," Clifton said, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5 per cent in the previous session but still away from the near four-year high it touched at the start of July. The single currency is up 13 per cent in 2025 as investors look for alternatives to US assets bruised by tariff uncertainties. The dollar index measure against six other key currencies was at 97.905. The rumblings around the Federal Reserve's independence and whether US President Donald Trump will fire Fed chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. US Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the US central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, "provided inflation expectations remain in check amidst worries about Fed independence". In commodities, oil prices edged lower on concerns the brewing trade war between major crude consumers the US and the European Union will curb fuel demand. Brent crude futures fell 0.35 per cent, to $68.97 a barrel, while US West Texas Intermediate crude eased 0.31 per cent to $66.99 per barrel. Asian share markets have held their ground near a four-year peak, buoyed by Wall Street's closing record high ahead of a slate of corporate earnings, while investors take stock of tariff negotiations between the US and its trading partners. The Japanese markets returned to action after a holiday following a weekend when the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares briefly jumped at the open on Tuesday before trading modestly higher, while bonds had a muted reaction as the election results were largely priced in and were not as bad as investors had feared. The yen rallied one per cent on Monday, recouping some of the losses from past weeks and was last little changed at 147.46 per dollar on Tuesday. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion which is negative for Japanese assets, including the yen. "The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen." MSCI's broadest index of Asia-Pacific shares outside Japan hit its highest level since October 2021 in the early Asian hours but was last little changed. The index is up nearly 16 per cent in 2025. Overnight, the S&P 500 and the Nasdaq notched record-high closes on Monday, lifted by Alphabet and other megacaps ahead of a burst of earnings reports this week. Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. "The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view," Clifton said, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5 per cent in the previous session but still away from the near four-year high it touched at the start of July. The single currency is up 13 per cent in 2025 as investors look for alternatives to US assets bruised by tariff uncertainties. The dollar index measure against six other key currencies was at 97.905. The rumblings around the Federal Reserve's independence and whether US President Donald Trump will fire Fed chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. US Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the US central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, "provided inflation expectations remain in check amidst worries about Fed independence". In commodities, oil prices edged lower on concerns the brewing trade war between major crude consumers the US and the European Union will curb fuel demand. Brent crude futures fell 0.35 per cent, to $68.97 a barrel, while US West Texas Intermediate crude eased 0.31 per cent to $66.99 per barrel. Asian share markets have held their ground near a four-year peak, buoyed by Wall Street's closing record high ahead of a slate of corporate earnings, while investors take stock of tariff negotiations between the US and its trading partners. The Japanese markets returned to action after a holiday following a weekend when the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares briefly jumped at the open on Tuesday before trading modestly higher, while bonds had a muted reaction as the election results were largely priced in and were not as bad as investors had feared. The yen rallied one per cent on Monday, recouping some of the losses from past weeks and was last little changed at 147.46 per dollar on Tuesday. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion which is negative for Japanese assets, including the yen. "The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen." MSCI's broadest index of Asia-Pacific shares outside Japan hit its highest level since October 2021 in the early Asian hours but was last little changed. The index is up nearly 16 per cent in 2025. Overnight, the S&P 500 and the Nasdaq notched record-high closes on Monday, lifted by Alphabet and other megacaps ahead of a burst of earnings reports this week. Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. "The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view," Clifton said, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5 per cent in the previous session but still away from the near four-year high it touched at the start of July. The single currency is up 13 per cent in 2025 as investors look for alternatives to US assets bruised by tariff uncertainties. The dollar index measure against six other key currencies was at 97.905. The rumblings around the Federal Reserve's independence and whether US President Donald Trump will fire Fed chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. US Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the US central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, "provided inflation expectations remain in check amidst worries about Fed independence". In commodities, oil prices edged lower on concerns the brewing trade war between major crude consumers the US and the European Union will curb fuel demand. Brent crude futures fell 0.35 per cent, to $68.97 a barrel, while US West Texas Intermediate crude eased 0.31 per cent to $66.99 per barrel. Asian share markets have held their ground near a four-year peak, buoyed by Wall Street's closing record high ahead of a slate of corporate earnings, while investors take stock of tariff negotiations between the US and its trading partners. The Japanese markets returned to action after a holiday following a weekend when the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares briefly jumped at the open on Tuesday before trading modestly higher, while bonds had a muted reaction as the election results were largely priced in and were not as bad as investors had feared. The yen rallied one per cent on Monday, recouping some of the losses from past weeks and was last little changed at 147.46 per dollar on Tuesday. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion which is negative for Japanese assets, including the yen. "The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen." MSCI's broadest index of Asia-Pacific shares outside Japan hit its highest level since October 2021 in the early Asian hours but was last little changed. The index is up nearly 16 per cent in 2025. Overnight, the S&P 500 and the Nasdaq notched record-high closes on Monday, lifted by Alphabet and other megacaps ahead of a burst of earnings reports this week. Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. "The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view," Clifton said, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5 per cent in the previous session but still away from the near four-year high it touched at the start of July. The single currency is up 13 per cent in 2025 as investors look for alternatives to US assets bruised by tariff uncertainties. The dollar index measure against six other key currencies was at 97.905. The rumblings around the Federal Reserve's independence and whether US President Donald Trump will fire Fed chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. US Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the US central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, "provided inflation expectations remain in check amidst worries about Fed independence". In commodities, oil prices edged lower on concerns the brewing trade war between major crude consumers the US and the European Union will curb fuel demand. Brent crude futures fell 0.35 per cent, to $68.97 a barrel, while US West Texas Intermediate crude eased 0.31 per cent to $66.99 per barrel.
